After a two-year pilot, Nike has ended its first-party supplier relationship with Amazon. Nike products will still be sold via third party resellers on the platform, a reality that likely contributed to Nike’s withdrawal. This is, at the least, a public relations blow to Amazon’s aspirations in apparel and footwear, categories where it has traditionally struggled to on-board premium, demand-generating brands like Nike.
The news comes as Amazon faces increased scrutiny over the quality and authenticity of some of the items being listed on its 3P marketplace by independent sellers, many of which increasingly are from China. Rival marketplace Walmart has emphasized its controls and focus on policing 3Ps, as well as being more supplier-friendly. Walmart benefits from having a significantly smaller assortment and scale at this stage, where it is currently building its marketplace out.
Many brands, especially those in more commoditized categories, do not have the same luxury to withdraw from Amazon as Nike has done. A reality for many is that due to the ambitious 3P sellers, their items will be on the platform whether they are there or not. Brands are encouraged to protect their brand equity, monitoring and controlling product detail pages, enrolling in brand protection programs like Brand Registry and Project Zero, and pursuing high-volume bad actor 3P sellers off the platform with the threat of legal action.
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